Under SEBI's new scheme, the three banks - Corporation bank, Union Bank of India and HDFC bank have received SEBI nod for offering the new payment facility for IPOs. As per the new scheme, the investor's application money will not be blocked with the issuer of IPO till allotment is done. These three banks can now be part of the Applications Supported by Blocked Amount (ASBA) process.
This will enable the applicants to keep money in the banks till allotment of shares. The application money to remain in the applicant's bank account till the allotment of the shares rather than waiting for the refunds by the companies to the applicants in case of non-allotment of shares. After the allotment of the shares, only the required amount of money will be debited from the applicants' accounts. According to the release issued by SEBI, these three banks are eligible to act as Self Certified Syndicate Banks (SCBS) in public issues which open on or after September 1.
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